CHICAGO | General Developments

[harryc]

Aug 22
Neat drilling rig, not only does it fold down for transport but it can do angles, and mount bits without help or needing to trundle about.




Aug 23
Going full steam (diesel)

[ardecila]

Originally Posted by LouisVanDerWright

In other words:

"Mayor proposes outright ban on middle class within city limits"

All the ARO does is make it impossible for developers to build anything less than luxury housing since they will have to include subsidized units for the poor and offset that cost with more expensive non subsidized units. The most useful thing they could do is allow widespread upzoning...

Moreno's already been demanding 100% on-site units. It doesn't seem to have slowed the pace of development in the 1st Ward, although prices have skyrocketed there. Wicker is basically Lincoln Park with better bars/retail at this point...

More broadly though, the mayor and Burnett are some of the most developer-friendly people in City Hall. Politically, this kind of tweak to the ARO might be the best-case scenario for developers given the increasing demands for affordable housing. This proposal is likely intended to keep some of the crazier ideas at bay (rent control, development moratoriums, etc) that are coming out of people like Ramirez-Rosa and Guzzardi. It won't affect already-expensive areas where expected rents are already high relative to construction cost, but we'll definitely see fewer proposals for neighborhoods like Avondale, Pilsen or Rogers Park that are on the edge...

[the urban politician]

^ Its a good point you make, but the question I have is: how will the free market adjust to these new policies.

I envision one scenario where developers, in return for more affordable units, ask for more density. In turn, they can build out the affordable units but never finish most of them. Keep them vacant and simply treat them as dead space. Remember, too many low income people will actually reduce the value of your property, so I imagine it makes better business sense to keep them vacant than to rent them out at affordable rates that break even at best. Then, perhaps at some future time when the affordable requirement lapses, they can then finish them and lease them out at market rates.

Another alternative is to try to build out more 10 or fewer unit buildings to bypass the regulation altogether. Personally I would like to see more of this as I prefer more fine-grained development in the city.

Either way, the city must have some sort of loopholes written into these laws. These laws are being created due to public pressure: most of these guys (Rahm, Moreno, etc) couldn't give 2 shits about affordable housing. They know we badly need the tax revenue from all of this development. So instead they pass these laws to appease their constituents but I'm betting they do so with a wink and a nod at developers.

[west-town-brad]

Originally Posted by the urban politician

^ Remember, too many low income people will actually reduce the value of your property, so I imagine it makes better business sense to keep them vacant than to rent them out at affordable rates that break even at best.

I'm not sure that people making $60,000 per year will reduce the value of your property... think teachers, cops, barbers, hipster bartenders, artisan pickle manufacturer, etc. Also the required credit scores are pretty high for one of these units.

[harryc]

Originally Posted by west-town-brad

I'm not sure that people making $60,000 per year will reduce the value of your property... think teachers, cops, barbers, hipster bartenders, artisan pickle manufacturer, etc. Also the required credit scores are pretty high for one of these units.

1) Yes they do reduce your property value - it's an equation not a feeling.
2) That is NOT always bad - the assessment (TAX) being much more formulaic than an actual sale where you can point out that you have teachers and firefighters as neighbors.

One of the biggest drivers of NIMBYs is the (unspoken) fear of property going up in value, and taxes with that.

[moorhosj]

Originally Posted by Stockerzzz

So they increase property taxes roughly $1,000,000,000. Then the politicians cry that "the rents are rising too fast!"

Why don't the articles ever factor in the higher property taxes due solely to political decisions, not only reassessments, when discussing "gentrification"?

Can we acknowledge that this phenomenon (lack of middle class housing being built and the corresponding rent increases) is happening across the entire country? Chicago taxes certainly have a local impact, but doesn't change the national reality.

The data shows that new homes sales are down considerably, while the median sales price is up.

http://www.businessinsider.com/the-h...-people-2017-8

[Via Chicago]

.

[JK47]

Originally Posted by harryc

1) Yes they do reduce your property value - it's an equation not a feeling.

Are we talking about low income people reducing the value of adjacent properties (or the entire multi-unit property) or are we talking about units that were built and fitted to be affordable to low income people?

Separately, if it is an equation then please point us to it. I'm curious to see which calculations are used to reduce the value of a property based on the number of low income residents.

[Vlajos]

Originally Posted by JK47

Are we talking about low income people reducing the value of adjacent properties (or the entire multi-unit property) or are we talking about units that were built and fitted to be affordable to low income people?

Separately, if it is an equation then please point us to it. I'm curious to see which calculations are used to reduce the value of a property based on the number of low income residents.

I assume they are referring to valuing a property using the income capitalization approach. If you are restricting rent, that will reduce value.

[west-town-brad]

Originally Posted by Vlajos

I assume they are referring to valuing a property using the income capitalization approach. If you are restricting rent, that will reduce value.

How can you quantify restricted rental income on a unit inside of a building that would not have been allowed to have been built in the first place per city zoning?

See, the developer gets an upzone to make more profit, but to do so he has to build a few "rent restricted units" inside of the building. The developer is not giving up any profit at all, instead he is being allowed to make more profit than he would have made has he constructed the building as of right before the upzone.

I'm as critical as anyone of the local politicians and the games they play - but this makes sense. Otherwise poor people will be commuting for 3 hours each way for the honor of serving you french fries and making $11 per hour before taxes.

[Investing In Chicago]

Originally Posted by west-town-brad

I'm as critical as anyone of the local politicians and the games they play - but this makes sense. Otherwise poor people will be commuting for 3 hours each way for the honor of serving you french fries and making $11 per hour before taxes.

This makes absolutely no sense; if a person chooses to commute 3 hours each way that is on them; there is plenty of affordable housing in Chicago.
I just picked up 6 SFH's in a solidly working class southside neighborhood for <$130K each. How much more affordable can you get than that? You can walk to the El, and be downtown in 15 min.

[LouisVanDerWright]

Originally Posted by Investing In Chicago

This makes absolutely no sense; if a person chooses to commute 3 hours each way that is on them; there is plenty of affordable housing in Chicago.
I just picked up 6 SFH's in a solidly working class southside neighborhood for <$130K each. How much more affordable can you get than that? You can walk to the El, and be downtown in 15 min.

I just bought two rt4 vacant lots, a two flat, and a four flat for $150k total one block from the train on the SW side. Lack of affordable housing is a myth. If you can't find a 2 BR for $800 anywhere in Chicago I will rent you one. PM me.

The problem is affordable units in acceptable state of repair. I buy all my buildings in a state of total disrepair and gut them. Then I can afford to hit the middle of the market with somewhat premium finishes. That's the real hole in the market. If you are too poor to afford my apartments then you probably qualify for section 8 and should have no problem getting housing.

[the urban politician]

^ Another example of how the powers that be in Chicago have just written off much of the south and west sides. So sad. It's like they aren't even being offered as alternatives for people who want cheaper housing because nobody in "their right minds" would want to live there.

[moorhosj]

Originally Posted by the urban politician

^It's like they aren't even being offered as alternatives for people who want cheaper housing because nobody in "their right minds" would want to live there.

What does it mean that those neighborhoods are "not even being offered as alternatives"? Why haven't more private companies done what RVDW explains? If there was a market inefficiency, shouldn't these businesses be able to easily arbitrage off of it?

[harryc]

Aug 28

[Via Chicago]

Originally Posted by moorhosj

What does it mean that those neighborhoods are "not even being offered as alternatives"? Why haven't more private companies done what RVDW explains? If there was a market inefficiency, shouldn't these businesses be able to easily arbitrage off of it?

it dosent have anything to do with "the city" offering alternatives. the reality is newcomers and transplant 20-somethings dont want to live down by midway or 95th street. all they know about is what theyve read about through popular press and places their friends also hang out. if there is not a dense concentration of something to pull them there they will not go much less live there, its that simple. for people who cant afford elsewhere or dont care about trend chasing, well, they are the people already living there.

its not "being offered as an alternative" because from the young hipster/yuppie mindset, it ISNT an alternative (until they themselves can legitimately no longer afford to live wherever it is they are and their hand is forced). theyd rather rent a tiny apartment or buy a condo in logan or lincoln park than buy a house in lawndale or brighton park, because thats not why they moved here in the first place.

thats not to say those other neighborhoods wont someday change themselves, but in the here and now, they appeal to different demographics

[pip]

Historic West Loop warehouse slated for demolition
https://chicago.curbed.com/2017/8/28...ion-washington

After being in Boston for a week about a month ago I saw how these old buildings can really be reused and offer a lot to the character, vitality and pleasantness of a neighborhood. Too bad Chicago is tearing so many down.

[harryc]

Aug 28

Ardus ?

From Left to right - Bentam Condos - 675 N Wells - Exhibit on Superior

Was Erie auto body - a parking lot - and a Howard Johnsons.

Aug 9
Parking - Must have parking.


Guiding a floor slab in between the girders.

[Via Chicago]

Originally Posted by pip

Historic West Loop warehouse slated for demolition
https://chicago.curbed.com/2017/8/28...ion-washington

After being in Boston for a week about a month ago I saw how these old buildings can really be reused and offer a lot to the character, vitality and pleasantness of a neighborhood. Too bad Chicago is tearing so many down.

hell, the article itself says the building was recently rehabbed. but all it takes is one short sighted and or greedy developer to make that irrelevant.

[PKDickman]

Originally Posted by Via Chicago

its not "being offered as an alternative" because from the young hipster/yuppie mindset, it ISNT an alternative (until they themselves can legitimately no longer afford to live wherever it is they are and their hand is forced). theyd rather rent a tiny apartment or buy a condo in logan or lincoln park than buy a house in lawndale or brighton park, because thats not why they moved here in the first place.

thats not to say those other neighborhoods wont someday change themselves, but in the here and now, they appeal to different demographics

There is some notion that demand drives supply. It doesn't, it drives price. Until The price gets high enough, supply is unaffected.
The big developers only want to build in the high rent districts. It's not that there isn't profit in other areas, there's just more profit at $2.50 to $3.00 a foot.
Until land costs in the high rent districts make it more profitable to build elsewhere, they never will.